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| The IMF predicts "zero growth" for the two-island federation's economy. |
BASSETERRE, St Kitts, June 18, CMC – The International Monetary Fund (IMF) has painted a gloomier forecast for St Kitts and Nevis’ economy, saying there will be no growth this year - but it praised the country for meeting all its fiscal targets as it continues to dig out from under one of the world’s highest mountains of debt.
The disclosure follows a two-week IMF mission to Basseterre that ended on Friday, as St Kitts and Nevis nears the first anniversary of a stand-by arrangement with the Washington-based multilateral lender.
On Friday, team leader George Tsibouris said a review of the country’s performance up to March’s end of the 2011 financial year suggested zero per cent growth for the rest of 2012, as uncertainty in the global economy continued to depress growth locally, with falling output in the construction industry.
But the IMF official was pleased that the two-island federation’s deficit shrank slightly – a sore point for the international financial institution and the government in Basseterre as it grapples with one of the highest levels of sovereign debt in the world relative to its size – peaking last year at 200 per cent of its economy.
The team linked the deficit reduction to lower imports, a higher tax intake and government spending cuts.
During the review, the IMF team met with Prime Minister Dr. Denzil Douglas, who is also the federation’s finance minister, and his cabinet, Nevisian Premier Joseph Parry and the Nevis Island Administration, the government’s economic experts, the Eastern Caribbean Central Bank (ECCB) and the business community.